In a compelling analysis, agrifoodtech consultant Rhishi Pethe delves into the transformative potential of AI in revitalizing the AgTech sector. The article, published on Software is Feeding the World (SFTW), highlights how the latest technological advancements, particularly in AI, are reshaping the startup landscape. Pethe’s narrative begins with a vivid illustration of a three-person AgTech startup leveraging iPhone LIDAR for field measurements, underscoring the significant reduction in development time and costs facilitated by AI tools. The development of products has been streamlined by platforms like Google’s Vertex AI and generative AI assistants, enabling faster and more cost-effective innovation.
The article contextualizes this trend within the broader historical shifts in technology eras: the cloud-first, mobile-first, and now AI-first periods. The cloud-first era, driven by services like AWS, provided scalable and cost-effective infrastructure, allowing venture capitalists to fund more startups with smaller investments. This democratized innovation but also increased the failure rate. The mobile-first era capitalized on the ubiquity of smartphones, enabling solutions like Uber and WhatsApp that bypassed traditional web infrastructure. Now, AI-first companies are leveraging generative AI to streamline processes, reduce costs, and accelerate product development. For example, startups like Traive Finance use AI for data-sparse credit modeling, significantly enhancing efficiency and decision-making.
Generative AI has been shown to improve software development productivity by 15–30%, according to Bain, and enables startups to automate routine tasks. This allows human experts to focus on high-value work, driving innovation and efficiency. In the AgTech sector, funding has declined in recent years, but AI-first startups could reinvigorate investment. Smaller funding rounds can support startups targeting niche, practical use cases, similar to the cloud era. This model may lead to higher failure rates but allows investors to take more risks with potentially smaller-scale but viable exits.
Pethe advocates for localized AgTech solutions over global scalability, as seen in Australian agriculture, to quickly achieve self-sustaining models. The article concludes on an optimistic note, predicting that as economic conditions improve, more investors will back efficient, AI-driven startups. However, success will depend on solving the right problems and navigating challenges like sales, marketing, and distribution in industries dominated by large players.
